Foreign experts inspect Vietnam’s conditions for stock market upgrade

FTSE Russell and Morgan Stanley experts work with the State Securities Commission leadership in Hanoi on November 4 on the upgrade of the Vietnamese stock market. (Photo: SSC)

At the meeting, SSC Chairwoman Vu Thi Chan Phuong briefed her guests on new policies implemented by the Government and the Ministry of Finance of Vietnam, aiming to create optimal conditions for foreign investors to engage in the country’s financial market and to meet the criteria for an upgrade to emerging market status.

She said the Ministry of Finance’s Circular 68/2024/TT-BTC, issued on September 18, 2024, cmae into force on November 4, that removes the requirement for international investors to have sufficient funds before executing stock purchase transactions. It introduces several new regulations on securities trading, settlement, clearing, the operations of securities companies, and information disclosure.

Additionally, the Vietnam Securities Depository and Clearing Corporation (VSDC) has issued new regulations related to depository members, securities transaction clearing and settlement, registration activities, and the transfer of securities ownership.

At the meeting, Du Wanming, director of Index Policy for the Asia-Pacific at FTSE Russell, expressed her pleasure at witnessing the recent progress by Vietnamese authorities and the stock market after returning to work in Vietnam in six months.

She affirmed that FTSE Russell will enhance communication and collaboration with stakeholders in Vietnam to support the trading activities of foreign investors in the country, as well as to share information and trading methods for FTSE clients in emerging markets.

Meanwhile, Young Lee, managing director for Asia at Morgan Stanley, noted that the new regulations under the Circular have made the Vietnamese stock market more aligned with FTSE Russell’s mandatory requirements.

Lee said that the removal of the requirement to have sufficient funds when placing orders was a significant request from investors, and acknowledged that it takes time to amend mechanisms and policies. He expressed his satisfaction with the important changes Vietnam has made regarding this criterion in a short period of time and commended the efforts of Vietnamese authorities in this regard.

With regard to future prospects, the Morgan Stanley representative stated that if the Vietnamese stock market is upgraded to emerging market status, it could attract US$800 million from passive investors using the FTSE index and an additional US$2 billion from passive investors using other indices. Furthermore, when the market is upgraded, more funds are expected to engage in the market, with an anticipated influx of approximately US$4-6 billion into Vietnam.